From the Working Families Party
BRIDGEPORT & GREENWICH–On Saturday, March 25th from 10:00am to 2:00pm, the Working Families Organization and tax justice advocates will call on Governor Malloy and state legislators to stop protecting the state’s billionaire financiers, who drain Connecticut’s economy by paying almost 20% lower tax rates than ordinary taxpayers with little return on investment for Connecticut.* Workers from throughout Connecticut will come together for a bus tour of Greenwich, where invoices will be delivered to the tony estates of billionaire hedge fund and private equity managers, some of whom have received millions of dollars in tax incentives from Governor Malloy.
Protesters will call on state legislators to close the carried interest tax loophole, an unfair tax code in which hedge fund owners pay a federal 20% tax rate on their salaries instead of the standard 39.6% tax rate levied on salaries of regular taxpayers.
To Ride the Bus
WHEN: Saturday, March 25th | 10:00AM Departure (Please arrive by 9:45AM)
WHERE: Make the Road CT | 850 State Street | Bridgeport, CT
March and Rally
WHEN: Saturday, March 25th | 1:00PM
WHERE: AQR Capital | Greenwich Plaza | Greenwich, CT
WHAT: A loophole in US federal tax code currently enables hedge fund and private equity owners to pay lower “carried interest” tax rates on income derived by investing other people’s money. By taxing that income fairly at the same rate as that of ordinary taxpayers, Connecticut could repatriate approximately $520 million/year, according to recent estimates. Those funds would narrow the state’s $1.5 billion deficit by one-third, saving funding for schools, hospitals and allowing taxpayers to hold onto to more of the earnings.
Currently, legislators in Connecticut, New York and New Jersey have proposed legislation entering into a regional compact agreement to close the carried interest tax loophole, in an effort to preclude unsubstantiated concerns about business or millionaire migration. These proposals have also gained ground in other regions of the country, and legislation has momentum in states such as Illinois.
WHY: Connecticut desperately needs to raise revenue to narrow its $1.5BB deficit. Rather than make billionaires pay taxes like everyone else, the state is forcing folks to lose their jobs, and cutting services that people rely on. More cuts are on the way and if working folks don’t sacrifice more, Governor Malloy is threatening to cut 4200 more jobs. Despite evidence-based research claiming that closing the tax loophole can raise $520 million a year, Governor Malloy has made it clear that he intends to protect this special benefit for millionaires and billionaires. Instead, he’s asked working folks to foot the bill and make more sacrifices to help fix the state’s budget.
That’s outrageously unfair and it’s why we’re taking a bus tour of these tony estates to call on legislators to close this unfair tax loophole.
Taxing carried interest fees similarly to how other income is taxed can contribute $520M/yr, and narrow Connecticut’s $1.5B deficit by more than one third, according to the report. A state bill (HB 6973) to close the “carried interest” tax loophole was introduced recently by State Representatives Robyn Porter and Josh Elliott, Working Families Organization, Make the Road CT and coalition members. The bill, which is supported by over 35 co-sponsors, would recapture the 19% of lost revenue which should be federally taxed at the top bracket at 39%, raising badly needed funds for schools, towns, health care and protecting essential public services in Connecticut. Similar bills are planned or have been introduced this year in New York, Massachusetts, New Jersey and Rhode Island as part of a regionally coordinated effort between lawmakers.
*A recent Atlantic article reported the finance sector is not the major economic engine it once was. According to the Roosevelt Institute, “every dollar of earnings or borrowing used to be associated with a 40-cent increase in investment. Since the 1980s, though, less than 10 cents of each earned or borrowed dollar is invested. This means fewer jobs created and more money winding up as shareholders’ profits, and ultimately, siphoned out of Connecticut’s economy.
Despite a quiet influx of financiers to Connecticut in recent years, business lobby groups continue to stoke fears about businesses and millionaire residents leaving the state if forced to stop paying special tax rates that are lower than those paid by teachers or truck drivers, for example.
>The evidence flatly contradicts their claim, showing growth in millionaire and billionaire populations.
Earlier this week, Forbes released its 2017 list featuring a record number of billionaires, including growth in Connecticut’s number of 10-figure earners.
According to Connecticut Voices for Children, the number of returns filed by earners with incomes above $1,000,000 increased by 18 percent and their adjusted gross income increased by 21.2 percent between 2010 and 2014. This means the millionaire population grew by 18 percent during a period when policies to increase compensation and economic security for working families were implemented.